Banks fall; RBI imposes higher CRR

Source : REUTERS
Last Updated: Mon, Nov 28, 2016 10:04 hrs
Rupee

** Indian banks fall after Reserve Bank of India announced steps to absorb excess liquidity

** Nifty PSU Bank Index falls as much as 4.43 pct to lowest since Nov 9

** State Bank of India drops as much as 4.96 pct

** RBI on Saturday hiked the cash reserve ratio temporarily, ordering banks to deposit 100 pct of their extra cash in a bid to absorb excess liquidity generated by a govt ban on larger banknotes

** The move will deprive banks of earning interest on funds parked with the RBI

** Banks will also not get to invest in government bonds

** Jefferies said the move puts expected improvement in bank net interest margins for the quarter at risk; big banks will be less hit



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